9 AN ACT
concerning racing and gaming; concerning electronic gaming
10 machines; amending
K.S.A. 74-8701, 74-8702, 74-8704, 74-8711 and
11 74-8721 and K.S.A.
1998 Supp. 19-101a, 74-8710, 74-8718, 74-8719,
12 74-8723, 74-8804,
74-8810 and 74-8837 and repealing the existing
13 sections.
14
15 Be it enacted by the Legislature of the
State of Kansas:
16 Section
1. K.S.A. 74-8701 is hereby amended to read as follows:
74-
17 8701. (a) K.S.A. 74-8701 through
74-872174-8723 and sections 8 through
18 20, and amendments thereto, shall be
known as and may be cited as the
19 Kansas lottery act.
20 (b) If any
provision of this act or the application thereof to any
person
21 or circumstance is held invalid, the
invalidity shall not affect other pro-
22 visions or application of the act which
can be given effect without the
23 invalid provision or application, and to
this end the provisions of this act
24 are severable.
25 Sec.
2. K.S.A. 74-8702 is hereby amended to read as follows:
74-
26 8702. As used in this act, unless the
context otherwise requires:
27 (a) "Commission"
means the Kansas lottery commission.
28
(b) "Electronic card" means a card purchased from a lottery
gaming
29 machine operator for use on an
electronic gaming machine.
30
(c) "Electronic gaming machine" means any electromechanical,
elec-
31 trical, electronic, video or
computerized device, contrivance or machine
32 authorized by the commission which, upon
the insertion of cash, tokens
33 or electronic cards, is available to
play, be operated or simulate the play
34 of, a game authorized by the commission,
including but not limited to,
35 bingo, poker, black jack, keno and slot
machines and which may deliver
36 or entitle the player operating the
machine to receive cash, tokens, mer-
37 chandise or credits that may be redeemed
for cash. Electronic gaming
38 machines may use bill validators and may
be single position reel-type,
39 single position single game video and
single position multigame video
40 electronic gaming, including but not
limited to, poker, black jack and slot
41 machines. Electronic gaming machines
shall be linked to a central com-
42 puter for purposes of security,
monitoring and auditing.
43 "Electronic gaming
machine" shall not include any casino table game,

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1 such as craps, poker, black jack,
roulette, keno, layout, numbers tickets,
2 baccarat, klondike table,
punchboard, punch cards, faro layout, ticket or
3 pull tab.
4
(b)(d) "Executive director" means the
executive director of the Kan-
5 sas lottery.
6
(c)(e) "Gaming equipment" means any
electric, electronic or me-
7 chanical devicecomputerized or electromechanical machine, mechanisms,
8 supply or device or other
equipment unique to the Kansas lottery used
9 directly in the operation of any
lottery and in the determination of winners
10 pursuant to this act or integral to the
operation of an electronic gaming
11 machine or which affects the results of
an electronic gaming machine by
12 determining win or loss.
13 (f) "Kansas
education enhancement technology fund" means the fund
14 established by section 17, and
amendments thereto.
15 (d)(g) "Kansas lottery" means the state agency created by
this act
16 to operate a lottery or lotteries pursuant
to this act.
17 (h) "Lottery"
or "state lottery" means the lottery or lotteries operated
18 pursuant to this act.
19 (i) "Lottery
gaming machine operator" means any parimutuel li-
20 censee with which the executive director
has contracted for the placement
21 of an electronic gaming machine pursuant
to this act.
22 (e)(j) "Lottery retailer" means any person with whom the
Kansas
23 lottery has contracted to sell lottery
tickets or shares, or both, to the
24 public.
25
(f) "Lottery" or "state lottery" means the lottery or
lotteries operated
26 pursuant to this act.
27 (g)(k) "Major procurement" means any gaming product or
service,
28 including but not limited to facilities,
advertising and promotional serv-
29 ices, annuity contracts, prize payment
agreements, consulting services,
30 equipment, tickets and other products and
services unique to the Kansas
31 lottery, but not
including.
32 "Major procurement"
shall not include materials, supplies, equipment
33 and services common to the ordinary
operations of state agencies.
34 (l) "Net
machine income" means the total of all cash and the face
35 value of all tokens or electronic cards
placed in an electronic gaming
36 machine less cash, merchandise or
credits that may be redeemed for cash
37 paid to players as winnings.
38
(m) "Parimutuel licensee" means:
39 (1) A facility
owner licensee or a facility manager licensee, as defined
40 by K.S.A. 74-8802, and amendments
thereto; or
41 (2) an
organization licensee, as defined by K.S.A. 74-8802, and
42 amendments thereto, which conducts races
at a racetrack facility located
43 in Crawford county.

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1
(n) "Parimutuel licensee location" means a racetrack facility
located
2 on or immediately adjacent to the
real estate of a parimutuel licensee
3 where live horse racing or live
greyhound racing has been authorized
4 prior to July 1, 1999, to be
conducted pursuant to the Kansas parimutuel
5 racing act. A parimutuel licensee
location may include any of the existing
6 structures located on the real
estate where the live horse racing or live
7 greyhound racing is authorized to
be conducted prior to July 1, 1999, or
8 any other structures that may be
constructed on or immediately adjacent
9 to such real estate. In order to
qualify as a parimutuel licensee location,
10 a racetrack facility where live horse
racing is conducted shall be approved
11 for at least 21 days each year on which
live horse racing shall be
12 conducted.
13 (h)(o) "Person" means any natural person, association,
corporation
14 or partnership.
15 (i)(p) "Prize" means any prize paid directly by the Kansas
lottery
16 pursuant to its rules and regulations.
17 (q) "Returned
ticket" means any ticket which was transferred to a
18 lottery retailer, which was not sold by
the lottery retailer and which was
19 returned to the Kansas lottery for
refund by issuance of a credit or
20 otherwise.
21 (j)(r) "Share" means any intangible manifestation
authorized by the
22 Kansas lottery to prove participation in a
lottery game.
23
(s) "Technology provider" means any person or entity other
than a
24 lottery gaming machine operator that
designs, manufactures, installs, op-
25 erates, distributes or supplies or
replaces an electronic gaming machine
26 for sale, lease or use in accordance
with this act.
27 (k)(t) "Ticket" means any tangible evidence issued by the
Kansas
28 lottery to prove participation in a lottery
game.
29 (u) "Token"
means a metal representative of value, which is not legal
30 tender, redeemable for cash only by the
issuing lottery gaming machine
31 operator at its parimutuel licensee
location and issued and sold by a lot-
32 tery gaming machine operator for the
sole purpose of playing an electronic
33 gaming machine.
34 (l)(v) "Vendor" means any person who has entered into a
major
35 procurement contract with the Kansas
lottery.
36
(m) "Returned ticket" means any ticket which was
transferred to a
37 lottery retailer, which was not
sold by the lottery retailer and which was
38 returned to the Kansas lottery for
refund by issuance of a credit or
39 otherwise.
40 (n)(w) "Video lottery machine" means any electronic video
game
41 machine that, upon insertion of cash, is
available to play or simulate the
42 play of a video game authorized by the
commission, including but not
43 limited to bingo, poker, black jack and
keno, and which uses a video

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1 display and microprocessors and in
which, by chance, the player may
2 receive free games or credits that
can be redeemed for cash.
3 Sec.
3. K.S.A. 74-8704 is hereby amended to read as follows:
74-
4 8704. (a) The executive director
shall have the power to:
5
(1) Supervise and administer the operation of the state
lottery in
6 accordance with the provisions of
this act and such rules and regulations
7 as adopted hereunder.
8
(2) Appoint, subject to the Kansas civil service act and
within the
9 limitations of appropriations
therefor, all other employees of the Kansas
10 lottery, which employees shall be in the
classified service unless otherwise
11 specifically provided by this act.
12 (3) Enter into
contracts for: (A) Advertising and promotional serv-
13 ices, subject to the provisions of
subsection (b); (B) annuities or other
14 methods deemed appropriate for the payment
of prizes; (C) data proc-
15 essing and other technical products,
equipment and services; and (D)
16 facilities as needed to operate the Kansas
lottery, including. Such con-
17 tracts may include, but not
be limited to, gaming equipment, tickets and
18 other services involved in major
procurement contracts, in accordance
19 with K.S.A. 74-8705, and amendments
thereto.
20 (4) Enter into
contracts with: (A) Persons for the sale of lottery
tick-
21 ets or shares to the public, as
provided by this act and; and (B) parimutuel
22 licensees for placement and operation of
electronic gaming machines at
23 parimutuel licensee locations. Such
contracts shall be subject to rules and
24 regulations adopted pursuant to this act,
which contractsbut shall not be
25 subject to the provisions of K.S.A. 75-3738
through 75-3744, and amend-
26 ments thereto.
27 (5) Require
lottery retailers to furnish proof of financial stability or
28 furnish surety in an amount based upon the
expected volume of sales of
29 lottery tickets or shares.
30 (6) Examine, or
cause to be examined by any agent or representative
31 designated by the executive director, any
books, papers, records or mem-
32 oranda of any lottery retailer or
lottery gaming machine operator for the
33 purpose of ascertaining compliance with the
provisions of this act or rules
34 and regulations adopted hereunder.
35 (7) Issue
subpoenas to compel access to or for the production of any
36 books, papers, records or memoranda in the
custody or control of any
37 lottery retailer or lottery gaming
machine operator, or to compel the
38 appearance of any lottery retailer or
lottery gaming machine operator or
39 employee of any lottery retailer or
lottery gaming machine operator, for
40 the purpose of ascertaining compliance with
the provisions of this act or
41 rules and regulations adopted hereunder.
Subpoenas issued under the
42 provisions of this subsection may be served
upon natural persons and
43 corporations in the manner provided in
K.S.A. 60-304, and amendments

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1 thereto, for the service of
process by any officer authorized to serve sub-
2 poenas in civil actions or by the
executive director or an agent or repre-
3 sentative designated by the executive
director. In the case of the refusal
4 of any person to comply with any such
subpoena, the executive director
5 may make application to the district
court of any county where such
6 books, papers, records, memoranda or
person is located for an order to
7 comply.
8
(8) Administer oaths and take depositions to the same extent
and
9 subject to the same limitations as
would apply if the deposition were in
10 aid of a civil action in the district
court.
11 (9) Require
fingerprinting of employees and such other persons who
12 work in sensitive areas within the lottery
as deemed appropriate by the
13 director. The director may submit such
fingerprints to the Kansas bureau
14 of investigation and to the federal bureau
of investigation for the purposes
15 of verifying the identity of such employees
and persons and obtaining
16 records of their criminal arrests and
convictions.
17 (b) The Kansas
lottery shall not engage in on-site display advertising
18 or promotion of the lottery at any amateur
athletic or sporting event
19 including, but not limited to, amateur
athletic sporting events at institu-
20 tions under the jurisdiction and control of
the state board of regents.
21 Sec.
4. K.S.A. 1998 Supp. 74-8710 is hereby amended to read as
22 follows: 74-8710. (a) The commission, upon
the recommendation of the
23 executive director, shall adopt rules and
regulations governing the estab-
24 lishment and operation of a state
lottery as necessary to carry out the
25 purposes of this actK.S.A. 74-8701 through 74-8723 and sections 8
26 through 20, and amendments thereto.
Temporary rules and regulations
27 may be adopted by the commission without
being subject to the provi-
28 sions and requirements of K.S.A. 77-415
through 77-438, and amend-
29 ments thereto, but shall be subject to
approval by the attorney general as
30 to legality and shall be filed with the
secretary of state and published in
31 the Kansas register. Temporary and
permanent rules and regulations may
32 include but shall not be limited to:
33 (1) Subject to
the provisions of subsection (b), the types of lottery
34 games to be conducted, including but not
limited to instant lottery, on-
35 line and traditional games and
electronic gaming machines operated at
36 parimutuel licensee locations, but
not including games on video lottery
37 machines.
38 (2) The manner of
selecting the winning tickets or shares, except
39 that, if a lottery game utilizes a drawing
of winning numbers, a drawing
40 among entries or a drawing among finalists,
such drawings shall always
41 be open to the public and shall be recorded
on both video and audio tape.
42 (3) The manner of
payment of prizes to the holders of winning
tickets
43 or shares.

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1 (4) The
frequency of the drawings or selections of winning tickets
2 or shares.
3 (5) The
type or types of locations at which tickets or shares may be
4 sold.
5 (6) The
method or methods to be used in selling tickets or shares.
6
(7) Additional qualifications for the selection of lottery
retailers and
7 the amount of application fees to be
paid by each.
8 (8) The
amount and method of compensation to be paid to lottery
9 retailers, including special bonuses
and incentives.
10 (9) Deadlines for
claims for prizes by winners of each lottery game.
11 (10) Provisions
for confidentiality of information submitted by ven-
12 dors pursuant to K.S.A. 74-8705, and
amendments thereto.
13 (11) Information
required to be submitted by vendors, in addition
14 to that required by K.S.A. 74-8705, and
amendments thereto.
15 (12) The major
procurement contracts or portions thereof to be
16 awarded to minority business enterprises
pursuant to subsection (a) of
17 K.S.A. 74-8705, and amendments thereto, and
procedures for the award
18 thereof.
19 (b) No new
lottery game shall commence operation after the effec-
20 tive date of this act unless first approved
by the governor or, in the gov-
21 ernor's absence or disability, the
lieutenant governor.
22 Sec.
5. K.S.A. 1998 Supp. 74-8711 is hereby amended to read as
23 follows: 74-8711. (a) There is hereby
established in the state treasury the
24 lottery operating fund and the
electronic gaming fund.
25 (b) The executive
director shall remit at least weekly to the state
26 treasurer all moneys collected from the
sale of lottery tickets and shares
27 and any other moneys received by or on
behalf of the Kansas lottery other
28 than funds to be deposited into the
electronic gaming fund pursuant to
29 subsection (e). Upon receipt of any
such remittance, the state treasurer
30 shall deposit the entire amount thereof in
the state treasury and credit it
31 to the lottery operating fund. Moneys
credited to the fund shall be ex-
32 pended or transferred only as provided by
this act. Expenditures from
33 such fund shall be made in accordance with
appropriations acts upon
34 warrants of the director of accounts and
reports issued pursuant to vouch-
35 ers approved by the executive director or
by a person designated by the
36 executive director.
37 (c) Moneys in the
lottery operating fund shall be used for:
38 (1) Except as
provided by this section, the payment of expenses of
39 the lottery, which shall include all costs
incurred in the operation and
40 administration of the Kansas lottery; all
costs resulting from contracts
41 entered into for the purchase or lease of
goods and services needed for
42 operation of the lottery, including but not
limited to supplies, materials,
43 tickets, independent studies and surveys,
data transmission, advertising,

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1 printing, promotion, incentives,
public relations, communications, and
2 distribution of tickets and shares;
and reimbursement of costs of facilities
3 and services provided by other state
agencies. Expenses of the lottery and
4 the racing and gaming commission
attributable to the regulation and op-
5 eration of electronic gaming
machines shall be paid as provided by sub-
6 section (e);
7 (2) the
payment of compensation to lottery retailers;
8
(3) transfers of moneys to the lottery prize payment fund
pursuant
9 to K.S.A. 74-8712, and
amendments thereto;
10 (4) transfers to
the state general fund pursuant to K.S.A. 74-8713,
11 and amendments thereto;
12 (5) transfers to
the state gaming revenues fund pursuant to subsec-
13 tion (d) of this section and as otherwise
provided by law; and
14 (6) the transfers
to the county reappraisal fund as prescribed by law.
15 (d) The director
of accounts and reports shall transfer moneys in the
16 lottery operating fund to the state gaming
revenues fund created by
17 K.S.A. 79-4801, and amendments
thereto, on or before the 15th day of
18 each month, for fiscal years
commencing on or after July 1, 1988 in an
19 amount certified monthly by the executive
director and determined as
20 follows, whichever is greater:
21 (1) In an amount
equal to the moneys in the lottery operating fund
22 in excess of those needed for the purposes
described in subsections (c)(1)
23 through (c)(4); or
24 (2) an amount
equal to not less than 30% of total monthly revenues
25 from the sales of lottery tickets and
shares less estimated returned tickets.
26 (e) The
executive director shall collect and remit to the state
treasurer
27 not less than once each week all net
machine income received from lottery
28 gaming machine operators to be credited
to the electronic gaming machine
29 fund. Separate accounts shall be
maintained in the electronic gaming ma-
30 chine fund for receipt of funds from
each lottery gaming machine oper-
31 ator. Not less than once each week, the
state treasurer shall distribute an
32 amount equal to 16% of the total
receipts credited to each such account
33 of the electronic gaming machine fund as
follows:
34 (1)
(A) Except as provided by paragraph (B), an amount equal
to
35 1% of the amount credited to the
electronic gaming machine fund shall
36 be distributed to the most populous city
in the county in which the op-
37 erator is located;
38 (B) in
Crawford county, such 1% shall be distributed equally be-
39 tween the county and the city of
Frontenac;
40 (2) an amount
equal to 1% of the amount credited to the electronic
41 gaming machine fund shall be paid to the
holder of the organization li-
42 cense at the parimutuel licensee
location, which shall not be in addition
43 to but in fulfillment of any contractual
obligation owed by the parimutuel

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1 licensee to the holder of the
organization license;
2 (3) an
amount sufficient to reimburse the Kansas racing and gaming
3 commission for all expenses
attributable to the regulation and operation
4 of electronic gaming
machines;
5 (4) an
amount sufficient to reimburse the lottery commission for
all
6 expenses attributable to the
regulation and operation of electronic gaming
7 machines; and
8 (5) of
the balance remaining after the distribution of money
pursuant
9 to paragraphs(1) through (4) of
this subsection, an amount equal to 50%
10 shall be credited to the Kansas
education technology enhancement fund
11 and an amount equal to 50% shall be
credited to the economic develop-
12 ment initiatives fund.
13 (f) After the
distribution of moneys pursuant to subsection (e), the
14 state treasurer shall remit the balance
in the account for each electronic
15 gaming machine operator to such
electronic gaming machine operator not
16 less than once each week. In no event
shall the amount of money remitted
17 pursuant to this subsection exceed 84%
of the total amount of moneys
18 credited to the electronic gaming
machine fund.
19 Sec.
6. K.S.A. 1998 Supp. 74-8718 is hereby amended to read as
20 follows: 74-8718. (a) It is unlawful
for:
21 (1) Any person to
sell a lottery ticket or share at a price other than
22 that fixed by rules and regulations adopted
pursuant to this act;
23 (2) any person
other than a lottery retailer authorized by the Kansas
24 lottery to sell or resell any lottery
ticket or share; or
25 (3) any person to
sell a lottery ticket or share to any person, knowing
26 such person to be under 18 years of age;
or
27 (4) any
parimutuel licensee to allow any person to play electronic
28 gaming machines knowing such person to
be under 21 years of age.
29 (b)
(1) Violation of this section is a class A nonperson
misdemeanor
30 upon conviction for a first offense;
and
31 (2) violation of
this section is a severity level 9, nonperson felony
32 upon conviction for a second or subsequent
offense.
33 Sec.
7. K.S.A. 1998 Supp. 74-8719 is hereby amended to read as
34 follows: 74-8719. (a) Except as provided
by subsection (c), it is unlawful
35 for any person to purchase a lottery ticket
or share, to play an electronic
36 gaming machine or to share in the
lottery winnings of a person, knowing
37 that such person is:
38 (1) The executive
director, a member of the commission or an em-
39 ployee of the Kansas lottery;
40 (2) an officer or
employee of a vendor contracting with the Kansas
41 lottery to supply gaming equipment or
tickets to the Kansas lottery for
42 use in the operation of any lottery
conducted pursuant to this act;
43 (3) a spouse,
child, stepchild, brother, stepbrother, sister, stepsister,

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1 parent or stepparent of a person
described by subsection (a)(1) or (2); or
2 (4) a
person who resides in the same household as any person de-
3 scribed by subsection (a)(1) or
(2).
4 (b)
(1) Violation of subsection (a) is a class A nonperson
misde-
5 meanor upon conviction for a first
offense.
6
(2) Violation of subsection (a) is a severity level 9,
nonperson felony
7 upon conviction for a second or
subsequent offense.
8
(c) Notwithstanding subsection (a), The
executive director may au-
9 thorize in writing any employee of
the Kansas lottery and any employee
10 of a lottery vendor to: (1) Purchase
a lottery ticket for the purposes of
11 verifying the proper operation of the state
lottery with respect to security,
12 systems operation and lottery retailer
contract compliance; or (2) play an
13 electronic gaming machine to verify the
proper operation thereof with
14 respect to security and contract
compliance. Any prize awarded as a result
15 of such ticket purchase shall become the
property of the Kansas lottery
16 and be added to the prize pools of
subsequent lottery games. No money
17 or merchandise shall be awarded to any
employee playing an electronic
18 gaming machine pursuant to this
subsection.
19 (d) Certain
classes of persons who, because of the unique nature of
20 the supplies or services they provide for
use directly in the operation of
21 a lottery pursuant to this act, may be
prohibited, in accordance with rules
22 and regulations adopted by the commission,
from participating in any
23 lottery in which such supplies or services
are used.
24 (e) Nothing in
this section shall prohibit lottery retailers or their
25 employees from purchasing lottery tickets
and shares or from being paid
26 a prize of a winning ticket or share.
27 (f) Each person
who purchases a lottery ticket or share thereby
28 agrees to be bound by rules and regulations
adopted by the commission
29 and by the provisions of this act.
30 New Sec.
8. (a) Upon the commencement of the operation of elec-
31 tronic gaming machines lottery gaming
machine operators shall supple-
32 ment purses from the balance of net machine
income distributed by the
33 state treasurer to each electronic gaming
machine operator pursuant to
34 subsection (e)(2) of K.S.A. 74-8711, and
amendments thereto, as follows:
35 (1) On or before
September 1 of each year, an aggregate sum of
36 $1,500,000 from all parimutuel licensees
calculated prorata upon the
37 number of parimutuel licensees to be paid
to the operators of live horse
38 racing to be used solely to supplement
purses for any forthcoming sched-
39 uled live horse racing.
40 (2) (A) At
the parimutuel licensee location in Sedgwick county, the
41 lottery gaming machine operator at the
parimutuel licensee location shall
42 pay such amounts as necessary to pay $100
per point awarded at the
43 parimutuel licensee location and an
additional $75 per point awarded at

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1 the parimutuel licensee location for
races won by Kansas-whelped
2 greyhounds;
3 (B) at the
parimutuel licensee location in Wyandotte county, the
4 lottery gaming machine operator at
the parimutuel licensee location shall
5 pay such amounts as necessary to pay
not less than $100 per point
6 awarded at the parimutuel licensee
location and an additional $75 per
7 point awarded at the parimutuel
licensee location for races won by Kan-
8 sas-whelped greyhounds; and
9 (C) at the
parimutuel licensee location in Crawford county, the lot-
10 tery gaming machine operator at the
parimutuel licensee location shall
11 pay such amounts as necessary to pay $80
per point awarded at the par-
12 imutuel licensee location and an additional
$60 per point awarded at the
13 parimutuel licensee location for races won
by Kansas-whelped
14 greyhounds.
15 (b) All purse
supplements paid pursuant to this subsection (2) shall
16 be according to the point schedule in
effect on January 1, 1999, at the
17 parimutuel licensee location in Sedgwick
county. All purse supplements
18 paid pursuant to this section shall be in
addition to purses and supple-
19 ments paid under K.S.A. 74-8801 et
seq., and amendments thereto.
20 (c) No electronic
gaming machine shall be operated pursuant to this
21 act unless the facility in which the
electronic gaming machine is operated
22 displays live and simulcast parimutuel
races on video terminals and has
23 installed parimutuel windows for wagering
on all parimutuel races.
24 (d) Except as
provided in subsection (e), no electronic gaming ma-
25 chine shall be operated pursuant to this
act unless:
26 (1) During the
first full calendar year and each year thereafter in
27 which electronic gaming machines are
operated, the parimutuel licensee
28 shall conduct at the parimutuel licensee
location in Sedgwick county at
29 least eight live racing programs each
calendar week for the number of
30 weeks equal to or greater than the number
of weeks raced during the
31 1998 calendar year with at least 12 live
races conducted each program.
32 (2) During the
first full calendar year and each year thereafter in
33 which electronic gaming machines are
operated, the parimutuel licensee
34 shall conduct at the parimutuel licensee
location in Wyandotte county at
35 least seven live racing programs each
calendar week for the number of
36 weeks equal to or greater than the number
of weeks raced during the
37 1998 calendar year with at least 12 live
races conducted each program.
38 (3) During the
first full calendar year and each year thereafter in
39 which electronic gaming machines are
operated, the parimutuel licensee
40 shall conduct at the parimutuel licensee
location in Crawford county live
41 racing for at least 150 days, comprised of
at least seven live racing pro-
42 grams each calendar week with at least 12
live races conducted each
43 program.

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1 (4) After
the first full calendar year and each year thereafter, in the
2 event the net machine income received
at the Crawford county parimu-
3 tuel licensee location is less than
$30,000,000, the minimum number of
4 live racing programs per calendar
week may be reduced by the parimutuel
5 licensee to five.
6 (e) The
commission may provide exceptions to the requirements of
7 subsection (d) for a parimutuel
licensee conducting live racing when
8 events beyond the control of the
licensee may render racing impossible
9 or impractical. Such events shall
include disaster, kennel sickness, state
10 imposed limitations on operations, weather
aberrations or other acts of
11 nature.
12 New Sec.
9. (a) The executive director shall contract with parimu-
13 tuel licensees to permit the operation and
management of electronic gam-
14 ing machines at parimutuel licensee
locations by the state of Kansas, sub-
15 ject to the provisions of this act. The
electronic gaming machine operator
16 shall purchase and transfer at its expense
to the Kansas lottery who shall
17 be the owner or licensee of all software
programs used by such parimutuel
18 licensees to operate electronic gaming
machines and shall sublicense such
19 software programs to each parimutuel
licensee. The use of progressive
20 electronic gaming machines is permitted.
The executive director shall
21 contract only with parimutuel licensees in
counties in which a proposition
22 submitted pursuant to section 19, and
amendments thereto, of this act
23 has been approved by the voters of such
county.
24 (b) Electronic
gaming machines purchased or leased by the elec-
25 tronic gaming machine operator at its own
expense may be installed,
26 operated or managed, owned or leased by
parimutuel licensees or by a
27 technology provider under contract with the
parimutuel licensee as pro-
28 vided by this act, and amendments thereto.
Such machine shall be subject
29 to the ultimate control and operation of
the Kansas lottery in accordance
30 with this act. At all times that electronic
gaming machines are in operation
31 at a parimutuel licensee location,
ownership or leasehold interest to such
32 machines shall be held by the Kansas
lottery commission. Each specific
33 type of electronic gaming machine shall be
approved by the Kansas lottery
34 in accordance with rules and regulations
adopted by the commission.
35 (c) Each contract
between the executive director and a lottery gam-
36 ing machine operator shall provide that the
Kansas lottery receive all of
37 the net machine income derived from the
operation of electronic gaming
38 machines at the parimutuel licensee
location. The initial term of such
39 contract shall be not less than seven
years. Such contract may be renewed
40 for terms of not less than seven years.
41 (d) The contracts
authorized by this section may include the
42 following:
43 (1) Accounting
procedures to determine the net machine income,

Sub. for SB 329

12

1 unclaimed merchandise and
credits.
2 (2) The
location of electronic gaming machines within the parimu-
3 tuel licensee location and other
matters relating to the operation of elec-
4 tronic gaming machines. The days and
hours of operation of such elec-
5 tronic gaming machines shall not be
restricted.
6 (3) Minimum
requirements for an electronic gaming machine op-
7 erator to provide qualified
oversight, security and supervision of the op-
8 eration of electronic gaming machines
at the parimutuel licensee location,
9 including the use of qualified
personnel with experience in applicable
10 technology.
11 (e) No electronic
gaming machine shall be operated pursuant to this
12 act unless the executive director of the
Kansas racing and gaming com-
13 mission first issues a certificate for such
machine authorizing its use at a
14 specified parimutuel licensee facility.
Each machine shall have the cer-
15 tificate prominently displayed thereon. Any
machine which does not dis-
16 play the certificate required by this
section is contraband and a public
17 nuisance subject to confiscation by any law
enforcement officer. A vio-
18 lation of this subsection is a severity
level 8, nonperson felony.
19 (f) The Kansas
lottery shall examine prototypes of electronic gaming
20 machines prior to certification pursuant to
this section and shall notify
21 the Kansas racing and gaming commission
which such types of electronic
22 gaming machines are approved for use by the
Kansas lottery.
23 (g) Electronic
gaming machines operated pursuant to this act shall:
24 (1) Pay out an
average of not less than 80% of the amount wagered;
25 (2) be linked
under a central communications system to provide au-
26 diting and other program information as
approved by the commission.
27 The communications systems approved by the
commission may not limit
28 participation to only one electronic gaming
machines manufacturer by
29 either the cost of implementing the
necessary program modifications to
30 communicate or the inability to communicate
with the central commu-
31 nications system;
32 (3) be on-line
and in constant communication with a central com-
33 puter located at a commission office
located at the parimutuel licensee
34 location. The Kansas lottery shall be the
owner of, or obtain the license
35 for, the operation of, such gaming
equipment as is necessary to implement
36 such central communications and auditing
functions.
37 (h) The executive
director shall inspect and certify individual elec-
38 tronic gaming machines operated by lottery
gaming machine operators
39 or other persons. The executive director
shall require the person seeking
40 the examination and certification of
electronic gaming machines to pay
41 the anticipated actual costs of the
examination in advance. After the com-
42 pletion of the examination, the executive
director shall refund any over-
43 payment or charge and collect amounts
sufficient to reimburse the ex-

Sub. for SB 329

13

1 ecutive director for any underpayment
of actual costs. The executive
2 director may contract for the
examination of electronic gaming machines
3 as required by this subsection, and
may rely upon testing done by or for
4 other states regulating electronic
gaming machines, if the executive di-
5 rector deems such testing to be
reliable and in the best interest of the
6 state of Kansas.
7 New Sec.
10. Except for persons acting in accordance with the rules
8 and regulations of the Kansas lottery
and the Kansas racing and gaming
9 commission in performing
installation, maintenance and repair services,
10 any person who, with the intent to
manipulate the outcome, pay-off or
11 operation of an electronic gaming machine,
manipulates the outcome,
12 pay-off or operation of an electronic
gaming machine by physical, elec-
13 trical or mechanical means shall be guilty
of a severity level 8, nonperson
14 felony.
15 New Sec.
11. Each lottery gaming machine operator shall hold the
16 executive director, the Kansas racing and
gaming commission and the
17 state harmless from and defend and pay for
the defense of any and all
18 claims which may be asserted against the
executive director, the Kansas
19 racing and gaming commission, the state or
the employees thereof, arising
20 from electronic gaming machines located at
the parimutuel licensee lo-
21 cation of that lottery gaming machine
operator. The provisions of this
22 section shall not apply to any claims
arising from the negligence or willful
23 misconduct of the executive director, the
Kansas racing and gaming com-
24 mission, the state or the employees
thereof.
25 New Sec.
12. Each lottery gaming machine operator shall provide
26 access to all its records and the physical
premises where the electronic
27 gaming machine activities occur for the
purpose of monitoring or inspect-
28 ing the electronic gaming machines and
gaming equipment. None of the
29 information disclosed pursuant to this
subsection shall be subject to dis-
30 closure under the Kansas open records act,
K.S.A. 45-216 et seq., and
31 amendments thereto.
32 New Sec.
13. A parimutuel licensee shall post one or more signs on
33 licensed premises at points of entry to the
areas where electronic gaming
34 machines are located to inform patrons of
the toll-free number available
35 to provide information and referral
services regarding compulsive or
36 problem gaming. The text shall be
determined by the secretary of the
37 department of health and environment.
Failure by the parimutuel li-
38 censee to post and maintain such signs
shall be cause for the imposition
39 of a fine not to exceed $500 per day.
40 New Sec.
14. (a) Wagers shall be received only from a person at a
41 parimutuel licensee location. No person
present at a parimutuel licensee
42 location shall place or attempt to place a
wager on behalf of another
43 person who is not present at a parimutuel
licensee location.

Sub. for SB 329

14

1
(b) Violation of this section is a class A nonperson
misdemeanor upon
2 conviction for a first offense.
Violation of this section is a severity level 9,
3 nonperson felony upon conviction for
a second or subsequent offense.
4 New Sec.
15. A person under age 21 shall not be permitted in an
5 area of a parimutuel licensee
location where gaming is being conducted,
6 except for a person at least 18 years
of age who is an employee of the
7 parimutuel licensee. No employee
under age 21 shall perform any func-
8 tion involved in gaming by the
patrons. No person under age 21 shall be
9 permitted to make a wager on an
electronic gaming machine.
10 New Sec.
16. If a disagreement arises between the executive direc-
11 tor and the Kansas racing and gaming
commission with regard to their
12 respective duties or responsibilities in
carrying out the purposes of the
13 Kansas lottery act, such disagreement shall
be resolved by the governor
14 in a manner not inconsistent with the
provisions of such act.
15 New Sec.
17. There is hereby created in the state treasury the Kan-
16 sas education technology enhancement fund.
Such fund shall be for the
17 sole purpose of improving access for
Kansans to learning and information
18 through modern telecommunications and
computer technologies. De-
19 posits to this fund shall derive
exclusively from revenues of the Kansas
20 lottery deposited pursuant to subsection
(e) of section 5, and amendments
21 thereto, and interest attributable to such
funds. The director of accounts
22 and reports shall disburse funds in
accordance with appropriations made
23 therefor to colleges and universities under
the control of the Kansas board
24 of regents, community colleges under the
control of the state board of
25 education, Washburn University, the state
library for grants-in-aid to local
26 libraries and the board of education of any
school district implementing
27 and maintaining a technology education fund
pursuant to K.S.A. 72-3703,
28 and amendments thereto. The legislature may
appropriate only those
29 funds in the Kansas education technology
enhancement fund as are on
30 hand as of December 31 of each year
preceding the legislative session in
31 which such appropriation is to be made.
Such funds shall not be used to
32 replace property taxes or general fund
support for activities, services,
33 supplies, maintenance, salaries, benefits,
equipment, facilities or other
34 purposes existing and funded by federal,
state or local moneys as of the
35 effective date of this act.
36 New Sec.
18. Pursuant to section 2 of the federal act entitled "An
37 Act to Prohibit Transportation of Gambling
Devices in Interstate and
38 Foreign Commerce," 15 U.S.C. 1171 through
1777, the state of Kansas,
39 acting by and through the duly elected and
qualified members of the
40 legislature, does hereby in this section,
and in accordance with and in
41 compliance with the provisions of section 2
of such federal act, declare
42 and proclaim that it is exempt from the
provision of section 2 of such
43 federal act to the extent that such
gambling devices are being transported

Sub. for SB 329

15

1 to or from a parimutuel licensee
location within the state of Kansas.
2 New Sec.
19. (a) Electronic gaming machines shall be operated pur-
3 suant to this act only in counties
where, in accordance with this section,
4 the qualified voters of the county
have voted to permit operation of elec-
5 tronic gaming machines at parimutuel
racetracks within the county.
6 (b) The
board of county commissioners, by resolution, may submit
7 and upon presentation of a petition
filed in accordance with subsection
8 (c), shall submit to the qualified
voters of the county a proposition to (1)
9 permit the operation of electronic
gaming machines at parimutuel race-
10 tracks within the county; or (2) prohibit
the operation of electronic gam-
11 ing machines at parimutuel racetracks
within the county. The proposition
12 shall be submitted to the voters either in
a countywide special election
13 called by the board of county commissioners
for that purpose and held
14 not less than 90 days after the resolution
is adopted or the petition is filed
15 or in the next general election as shall be
specified by the board of county
16 commissioners or in the petition, as the
case may be.
17 (c) A petition to
submit a proposition to the qualified voters of a
18 county pursuant to this section shall be
filed with the county election
19 officer. The petition shall be signed by
qualified voters of the county equal
20 in number to not less than 10% of the
voters of the county who voted for
21 the office of secretary of state at the
last preceding general election at
22 which such office was elected. The
appropriate version of the following
23 shall appear on the petition:
24 "We request an
election to determine whether the operation of electronic gaming
ma-
25 chines by the Kansas lottery shall be
permitted at parimutuel racetracks in ____________
26 county."
27 (d) Upon the
adoption of a resolution or the submission of a valid
28 petition calling for an election pursuant
to this section, the county election
29 officer shall cause the appropriate version
of the following proposition to
30 be placed on the ballot at the election
called for that purpose:
31 "Shall the operation
of electronic gaming machines by the Kansas lottery be
permitted
32 at parimutuel racetracks in ____________
county?"
33 (e) If a majority
of the votes cast and counted at such election is in
34 favor of permitting the operation of such
games at such racetracks, the
35 Kansas lottery shall enter a contract with
parimutuel licensees to operate
36 such games at the parimutuel racetracks
located in the county. If a ma-
37 jority of the votes cast and counted at an
election under this section is
38 against permitting the operation of
electronic gaming machines at pari-
39 mutuel racetracks in the county, the Kansas
lottery shall not operate such
40 games. The county election officer shall
transmit a copy of the certifica-
41 tion of the results of the election to the
executive director.
42 (f) The election
provided for by this section shall be conducted, and
43 the votes counted and canvassed, in the
manner provided by law for

Sub. for SB 329

16

1 question submitted elections of the
county.
2 (g) If in
any election provided for by this section a majority of the
3 votes cast and counted is against
permitting the operation of electronic
4 gaming machines in the county,
another election submitting the issue of
5 the operation of electronic gaming
machines in the county shall not be
6 held for at least two years from the
date of such election.
7 New Sec.
20. Nothing in this act shall restrict the jurisdiction of
the
8 Kansas racing and gaming commission
to regulate activities conducted at
9 parimutuel licensee facilities
including the premises on which electronic
10 gaming machines are operated.
11 Sec.
21. K.S.A. 74-8721 is hereby amended to read as follows:
74-
12 8721. All sales of lottery tickets and
shares and electronic gaming machine
13 games shall be exempt from
retailers' sales taxes imposed pursuant to
14 K.S.A. 12-187 et seq., and
amendments thereto, and from the tax imposed
15 by the Kansas retailers' sales tax act.
16 Sec.
22. K.S.A. 1998 Supp. 74-8723 is hereby amended to read as
17 follows: 74-8723. (a) The
Kansas lottery and the office of executive di-
18 rector of the Kansas lottery, established
by K.S.A. 74-8703, and amend-
19 ments thereto, and the Kansas lottery
commission, created by K.S.A. 74-
20 8709, and amendments thereto, shall be and
hereby are abolished on July
21 1, 20022007.
22 (b) This
section shall be part of and supplemental to the
Kansas
23 lottery act.
24 Sec.
23. K.S.A. 1998 Supp. 74-8804 is hereby amended to read as
25 follows: 74-8804. (a) During race meetings,
the commission and its des-
26 ignated employees may observe and inspect
all racetrack facilities oper-
27 ated by licensees and all racetracks
simulcasting races to racetrack facil-
28 ities in Kansas, including but not limited
to all machines, equipment and
29 facilities used for parimutuel wagering
and electronic gaming.
30 (b) Commission
members and hearing officers designated by the
31 commission may administer oaths and take
depositions to the same extent
32 and subject to the same limitations as
would apply if the deposition was
33 in aid of a civil action in the district
court.
34 (c) The
commission may examine, or cause to be examined by any
35 agent or representative designated by the
commission, any books, papers,
36 records or memoranda of any licensee, or of
any racetrack or business
37 involved in simulcasting races to racetrack
facilities in Kansas, or of any
38 business or individual involved in
electronic gaming for the purpose of
39 ascertaining compliance with any provision
of this act or any rule and
40 regulation adopted hereunder.
41 (d) The
commission may issue subpoenas to compel access to or for
42 the production of any books, papers,
records or memoranda in the cus-
43 tody or control of any licensee or officer,
member, employee or agent of

Sub. for SB 329

17

1 any licensee, or to compel the
appearance of any licensee or officer, mem-
2 ber, employee or agent of any
licensee, or of any racetrack or business
3 involved in simulcasting races to
racetrack facilities in this state, for the
4 purpose of ascertaining compliance
with any of the provisions of this act
5 or any rule and regulation adopted
hereunder. Subpoenas issued pursuant
6 to this subsection may be served upon
individuals and corporations in the
7 same manner provided in K.S.A.
60-304, and amendments thereto, for
8 the service of process by any officer
authorized to serve subpoenas in civil
9 actions or by the commission or an
agent or representative designated by
10 the commission. In the case of the refusal
of any person to comply with
11 any such subpoena, the executive director
may make application to the
12 district court of any county where such
books, papers, records, memo-
13 randa or person is located for an order to
comply.
14 (e) The
commission shall allocate equitably race meeting dates, rac-
15 ing days and hours to all organization
licensees and assign such dates and
16 hours so as to minimize conflicting dates
and hours within the same ge-
17 ographic market area.
18 (f) The
commission shall have the authority, after notice and an op-
19 portunity for hearing in accordance with
rules and regulations adopted
20 by the commission, to exclude, or cause to
be expelled, from any race
21 meeting or racetrack facility, or to
prohibit a licensee from conducting
22 business with any person:
23 (1) Who has
violated the provisions of this act or any rule and reg-
24 ulation or order of the commission;
25 (2) who has been
convicted of a violation of the racing or gambling
26 laws of this or any other state or of the
United States or has been adju-
27 dicated of committing as a juvenile an act
which, if committed by an adult,
28 would constitute such a violation; or
29 (3) whose
presence, in the opinion of the commission, reflects ad-
30 versely on the honesty and integrity of
horse or greyhound racing or
31 interferes with the orderly conduct of a
race meeting.
32 (g) The
commission shall review and approve all proposed construc-
33 tion and major renovations to racetrack
facilities owned or leased by li-
34 censees.
35 (h) The
commission shall review and approve all proposed contracts
36 with racetracks or businesses involved in
simulcasting races to racetrack
37 facilities in Kansas.
38 (i) The
commission may suspend a horse or greyhound from partic-
39 ipation in races if such horse or greyhound
has been involved in any
40 violation of the provisions of this act or
any rule and regulation or order
41 of the commission.
42 (j) The
commission, within 72 hours after any action taken by a stew-
43 ard or racing judge and upon appeal by any
interested party or upon its

Sub. for SB 329

18

1 own initiative, may overrule any
decision of a steward or racing judge,
2 other than a decision regarding
disqualifications for interference during
3 the running of a race, if the
preponderance of evidence indicates that:
4 (1) The
steward or racing judge mistakenly interpreted the law;
5 (2) new
evidence of a convincing nature is produced; or
6 (3) the
best interests of racing and the state may be better served.
7 A decision of
the commission to overrule any decision of a steward or
8 racing judge shall not change the
distribution of parimutuel pools to the
9 holders of winning tickets. A
decision of the commission which would
10 affect the distribution of purses in any
race shall not result in a change
11 in that distribution unless a written claim
is submitted to the commission
12 within 48 hours after completion of the
contested race by one of the
13 owners or trainers of a horse or greyhound
which participated in such
14 race and a preponderance of evidence
clearly indicates to the commission
15 that one or more of the grounds for
protest, as provided for in rules and
16 regulations of the commission, has been
substantiated.
17 (k) The
commission, after notice and a hearing in accordance with
18 rules and regulations adopted by the
commission, may impose a civil fine
19 not exceeding $5,000 for each violation of
any provision of this act, or any
20 rule and regulation of the commission, for
which no other penalty is
21 provided.
22 (l) The
commission shall adopt rules and regulations specifying and
23 regulating:
24 (1) Those drugs
and medications which may be administered, and
25 possessed for administration, to a horse or
greyhound within the confines
26 of a racetrack facility; and
27 (2) that
equipment for administering drugs or medications to horses
28 or greyhounds which may be possessed within
the confines of a racetrack
29 facility.
30 (m) The
commission may adopt rules and regulations providing for
31 the testing of any licensees of the
commission, and any officers, directors
32 and employees thereof, to determine whether
they are users of any con-
33 trolled substances.
34 (n) The
commission shall require fingerprinting of all persons nec-
35 essary to verify qualification for
employment by the commission or to
36 verify qualification for any license,
including a simulcasting license, issued
37 pursuant to this act. The commission shall
submit such fingerprints to the
38 Kansas bureau of investigation and to the
federal bureau of investigation
39 for the purposes of verifying the identity
of such persons and obtaining
40 records of criminal arrests and
convictions.
41 (o) The
commission may receive from commission security person-
42 nel, the Kansas bureau of investigation or
other criminal justice agencies,
43 including but not limited to the federal
bureau of investigation and the

Sub. for SB 329

19

1 federal internal revenue service,
such criminal history record information
2 (including arrest and nonconviction
data), criminal intelligence informa-
3 tion and information relating to
criminal and background investigations
4 as necessary for the purpose of
determining qualifications of licensees of
5 the commission, employees of the
commission, applicants for employ-
6 ment by the commission, and
applicants for licensure by the commission,
7 including applicants for simulcasting
licenses. Upon the written request
8 of the chairperson of the commission,
the commission may receive from
9 the district courts such information
relating to juvenile proceedings as
10 necessary for the purpose of determining
qualifications of employees of
11 and applicants for employment by the
commission and determining qual-
12 ifications of licensees of and applicants
for licensure by the commission.
13 Such information, other than conviction
data, shall be confidential and
14 shall not be disclosed except to members
and employees of the commis-
15 sion as necessary to determine
qualifications of such licensees, employees
16 and applicants. Any other disclosure of
such confidential information is a
17 class A misdemeanor and shall constitute
grounds for removal from office,
18 termination of employment or denial,
revocation or suspension of any
19 license issued under this act.
20 (p) The
commission, in accordance with K.S.A. 75-4319, and
amend-
21 ments thereto, may recess for a closed or
executive meeting to receive
22 and discuss information received by the
commission pursuant to subsec-
23 tion (o) and to negotiate with licensees of
or applicants for licensure by
24 the commission regarding any such
information.
25 (q) The
commission may enter into agreements with the federal bu-
26 reau of investigation, the federal internal
revenue service, the Kansas
27 attorney general or any state, federal or
local agency as necessary to carry
28 out the duties of the commission under this
act.
29 (r) The
commission shall adopt such rules and regulations as nec-
30 essary to implement and enforce the
provisions of this actK.S.A. 74-8801
31 et. seq., and amendments thereto
32 (s) The
commission may adopt rules and regulations with respect to
33 security, safety and honest conduct at
all parimutuel licensee locations as
34 defined in section 2, and amendments
thereto.
35 (t) The
commission shall have the power to investigate alleged vio-
36 lations of sections 8 through 20 and
K.S.A. 74-8801et seq., and amend-
37 ments thereto, or commission rules and
regulations, orders and final de-
38 cisions.
39 (u) The
commission shall have the power to authorize security meas-
40 ures required in any areas where
electronic gaming machines are located.
41 (v) The
commission shall have the power to take any other action as
42 may be reasonable or appropriate to
enforce the provisions of sections 8
43 through 20 and K.S.A. 74-8801et
seq., and amendments thereto, or com-

Sub. for SB 329

20

1 mission rules and regulations,
orders and final decisions.
2 Sec.
24. K.S.A. 1998 Supp. 74-8810 is hereby amended to read as
3 follows: 74-8810. (a) It is a class A
nonperson misdemeanor for any person
4 to have a financial interest,
directly or indirectly, in any racetrack facility
5 within the state of Kansas or in any
host facility for a simulcast race
6 displayed in this
stateKansas or any parimutuel licensee location in
Kan-
7 sas:
8 (1) While
such person is executive director or a member of the com-
9 mission or during the five years
immediately following such person's term
10 as executive director or member of the
commission; or
11 (2) while such
person is an officer, director or member of an organ-
12 ization licensee, other than a fair
association or horsemen's nonprofit or-
13 ganization, or during the five years
immediately following the time such
14 person is an officer, director or member of
such an organization licensee.
15 (b) It is a class
A nonperson misdemeanor for any member, employee
16 or appointee of the commission, including
stewards and racing judges, to
17 knowingly:
18 (1) Participate
in the operation of or have a financial interest in any
19 business which has been issued a
concessionaire license, racing or wa-
20 gering or electronic gaming machine
equipment or services license, fa-
21 cility owner license or facility manager
license, or any business which sells
22 goods or services to an organization
licensee;
23 (2) participate
directly or indirectly as an owner, owner-trainer or
24 trainer of a horse or greyhound, or as a
jockey of a horse, entered in a
25 race meeting conducted in this state or
as an owner, operator, manager
26 or consultant in electronic gaming in
Kansas;
27 (3) place a wager
on an entry in a horse or greyhound race conducted
28 by an organization licensee or any
parimutuel licensee location; or
29 (4) place a
wager on or bet or play an electronic gaming machine at
30 a parimutuel licensee location in
Kansas; or
31 (4)(5) accept any compensation, gift, loan, entertainment,
favor or
32 service from any licensee, except such
suitable facilities and services
33 within a racetrack facility operated by an
organization licensee as may be
34 required to facilitate the performance of
the member's, employee's or
35 appointee's official duties.
36 (c)
(1) Except as provided in paragraph (2), it is a class A
nonperson
37 misdemeanor for any member, employee or
appointee of the commission,
38 or any spouse, parent, grandparent,
brother, sister, child, son-in-law,
39 daughter-in-law, grandchild, uncle, aunt,
parent-in-law, brother-in-law or
40 sister-in-law thereof, to:
41 (A) Hold any
license issued by the commission, except that a steward
42 or racing judge shall hold an occupation
license to be such a steward or
43 judge; or

Sub. for SB 329

21

1 (B) enter
into any business dealing, venture or contract with an
2 owner or lessee of a racetrack
facility in Kansas parimutuel licensee lo-
3 cation in Kansas.
4 (2) This
subsection shall not apply to any racing judge holding an
5 occupation license, if such racing
judge is employed at a racetrack facility
6 and such racing judge's relative, as
listed above, is a licensed owner,
7 owner-trainer or trainer of a
greyhound that races at a different racetrack
8 facility.
9 (d) It is a
class A nonperson misdemeanor for any officer, director
10 or member of an organization licensee,
other than a fair association or
11 horsemen's nonprofit organization, to:
12 (1) Receive, for
duties performed as an officer or director of such
13 licensee, any compensation or reimbursement
or payment of expenses in
14 excess of the amounts provided by K.S.A.
75-3223, and amendments
15 thereto, for board members'
compensation, mileage and expenses; or
16 (2) enter into
any business dealing, venture or contract with the
17 organization licensee or, other than in the
capacity of an officer or director
18 of the organization licensee, with a
facility owner licensee, facility man-
19 ager licensee, racing or wagering equipment
or services license or con-
20 cessionaire licensee, or with any host
facility for a simulcast race displayed
21 in this state.
22 (e) It is a class
A nonperson misdemeanor for any facility owner
23 licensee or facility manager licensee,
other than a horsemen's association,
24 or any officer, director, employee,
stockholder or shareholder thereof or
25 any person having an ownership interest
therein, to participate directly
26 or indirectly as an owner, owner-trainer or
trainer of a horse or grey-
27 hound, or as a jockey of a horse, entered
in a live race conducted in this
28 state.
29 (f) It is a class
A nonperson misdemeanor for any licensee of the
30 commission, or any person who is an
officer, director, member or em-
31 ployee of a licensee, to place a wager at a
racetrack facility located in
32 Kansas on an entry in a horse or greyhound
race if:
33 (1) The
commission has by rules and regulations designated such
34 person's position as a position which could
influence the outcome of such
35 race or the parimutuel wagering thereon;
and
36 (2) such race is
conducted at or simulcast to the racetrack facility
37 where the licensee is authorized to engage
in licensed activities.
38 (g) It is a class
B nonperson misdemeanor for any person to use any
39 animal or fowl in the training or racing of
racing greyhounds.
40 (h) It is a class
A nonperson misdemeanor for any person to:
41 (1) Sell a
parimutuel ticket or an interest in such a ticket to a person
42 knowing such person to be under 18 years of
age, upon conviction of the
43 first offense;

Sub. for SB 329

22

1 (2) accept,
transmit or deliver, from a person outside a racetrack
2 facility, anything of value to be
wagered in any parimutuel system of
3 wagering within a racetrack facility,
upon conviction of the first offense;
4
(3) administer or conspire to administer any drug or
medication to
5 a horse or greyhound within the
confines of a racetrack facility in violation
6 of rules and regulations of the
commission, upon conviction of the first
7 offense;
8 (4) possess
or conspire to possess, within the confines of a racetrack
9 facility, any drug or medication for
administration to a horse or greyhound
10 in violation of rules and regulations of
the commission, upon conviction
11 of the first offense;
12 (5) possess or
conspire to possess, within the confines of a racetrack
13 facility, equipment for administering drugs
or medications to horses or
14 greyhounds in violation of rules and
regulations of the commission, upon
15 conviction of the first offense;
16 (6) enter any
horse or greyhound in any race knowing such horse or
17 greyhound to be ineligible to compete in
such race pursuant to K.S.A.
18 74-8812, and amendments thereto;
or
19 (7) prepare or
cause to be prepared an application for registration
20 of a horse pursuant to K.S.A.
74-8830, and amendments thereto, knowing
21 that such application contains false
information.
22 (i) It is a
severity level 8, nonperson felony for any person to:
23 (1) Sell a
parimutuel ticket or an interest in such a ticket to a person
24 knowing such person to be under 18 years of
age, upon conviction of the
25 second or a subsequent offense;
26 (2) accept,
transmit or deliver, from any person outside a racetrack
27 facility, anything of value to be wagered
in any parimutuel system of
28 wagering within a racetrack facility, upon
the second or a subsequent
29 conviction;
30 (3) conduct or
assist in the conduct of a horse or greyhound race, or
31 the display of a simulcast race, where the
parimutuel system of wagering
32 is used or is intended to be used and where
no license has been issued
33 to an organization to conduct or simulcast
such race;
34 (4) enter any
horse or greyhound in any race conducted by an or-
35 ganization licensee knowing that the class
or grade in which such horse
36 or greyhound is entered is not the true
class or grade or knowing that the
37 name under which such horse or greyhound is
entered is not the name
38 under which such horse or greyhound has
been registered and has pub-
39 licly performed;
40 (5) use or
conspire to use any device, other than an ordinary whip
41 for horses or a mechanical lure for
greyhounds, for the purpose of af-
42 fecting the speed of any horse or greyhound
at any time during a race
43 conducted by an organization licensee;

Sub. for SB 329

23

1 (6) possess
or conspire to possess, within the confines of a racetrack
2 facility, any device, other than an
ordinary whip for horses or a mechanical
3 lure for greyhounds, designed or
intended to affect the speed of a horse
4 or greyhound;
5
(7) administer or conspire to administer any drug or
medication to
6 a horse or greyhound within the
confines of a racetrack facility in violation
7 of rules and regulations of the
commission, upon conviction of the second
8 or a subsequent offense;
9 (8) possess
or conspire to possess, within the confines of a racetrack
10 facility, any drug or medication for
administration to a horse or greyhound
11 in violation of rules and regulations of
the commission, upon conviction
12 of the second or a subsequent offense;
13 (9) possess or
conspire to possess, within the confines of a racetrack
14 facility, equipment for administering drugs
or medications to horses or
15 greyhounds in violation of rules and
regulations of the commission, upon
16 conviction of the second or a subsequent
offense;
17 (10) sponge the
nostrils or windpipe of a horse for the purpose of
18 stimulating or depressing such horse or
affecting its speed at any time
19 during a race meeting conducted by an
organization licensee;
20 (11) alter or
attempt to alter the natural outcome of any race con-
21 ducted by, or any simulcast race displayed
by, an organization licensee or
22 transmit or receive an altered race or
delayed broadcast race if parimutuel
23 wagering is conducted or solicited after
off time of the race;
24 (12) influence or
attempt to influence, by the payment or promise
25 of payment of money or other valuable
consideration, any person to alter
26 the natural outcome of any race conducted
by, or any simulcast race
27 displayed by, an organization licensee;
28 (13) influence or
attempt to influence any member, employee or
29 appointee of the commission, by the payment
or promise of payment of
30 money or other valuable consideration, in
the performance of any official
31 duty of that member, employee or
appointee;
32 (14) fail to
report to the commission or to one of its employees or
33 appointees knowledge of any violation of
this act by another person for
34 the purpose of stimulating or depressing
any horse or greyhound, or af-
35 fecting its speed, at any time during any
race conducted by an organiza-
36 tion licensee;
37 (15) commit any
of the following acts with respect to the prior racing
38 record, pedigree, identity or ownership of
a registered horse or greyhound
39 in any matter related to the breeding,
buying, selling or racing of the
40 animal: (A) Falsify, conceal or cover up,
by any trick, scheme or device,
41 a material fact; (B) make any false,
fictitious or fraudulent statement or
42 representation; or (C) make or use any
false writing or document knowing
43 that it contains any false, fictitious or
fraudulent statement or entry; or

Sub. for SB 329

24

1 (16) pass
or attempt to pass, cash or attempt to cash any altered or
2 forged parimutuel ticket knowing it
to have been altered or forged.
3 (j) It
is a severity level 8, nonperson felony for any person
playing
4 or using any electronic gaming
machine at a parimutuel licensee location
5 in Kansas to:
6
(1) Knowingly use other than a lawful coin or legal tender of
the
7 United States of America, or to
use coin not of the same denomination as
8 the coin intended to be used in an
electronic gaming machine, except that
9 in the playing of any electronic
gaming machine or similar gaming device,
10 it shall be lawful for any person to use
gaming billets, tokens or similar
11 objects therein which are approved by
the lottery commission;
12 (2) to
knowingly possess or use, while on the premises of a
parimutuel
13 licensee location any cheating or
thieving device, including but not limited
14 to, tools, wires, drills, coins attached
to strings or wires or electronic or
15 magnetic devices to facilitate removing
from any electronic gaming ma-
16 chine any money or contents thereof,
except that a duly authorized em-
17 ployee of the commission or a parimutuel
licensee location may possess
18 and use any of the foregoing only in
furtherance of the employee's em-
19 ployment at the parimutuel licensee
location; or
20 (3) to
knowingly possess or use while on the premises of any pari-
21 mutuel licensee location any key or
device designed for the purpose of or
22 suitable for opening or entering any
electronic gaming machine or similar
23 gaming device or drop box, except that a
duly authorized employee of the
24 commission or a parimutuel licensing
location may possess and use any
25 of the foregoing only in furtherance of
the employee's employment at the
26 parimutuel licensee location.
27 (j)(k) No person less than 18 years of age shall purchase
a parimutuel
28 ticket or an interest in such a ticket. Any
person violating this subsection
29 shall be subject to adjudication as a
juvenile offender pursuant to the
30 Kansas juvenile justice code.
31 Sec.
25. K.S.A. 1998 Supp. 74-8837 is hereby amended to read as
32 follows: 74-8837. (a) No organization
licensee or facility manager licensee
33 shall permit any business not owned and
operated by the organization
34 licensee to provide integral racing or
wagering or electronic gaming ma-
35 chine equipment or services, as
designated by the commission, to an or-
36 ganization licensee unless such business
has been issued a racing or wa-
37 gering or electronic gaming machine
equipment or services license by the
38 commission. Such equipment and services
include but are not limited to
39 totalisator, photo finish, video replay
and, video reception and transmis-
40 sion, surveillance, electronic computer
components, random number gen-
41 erator or cabinet thereof and token
redemption equipment or services.
42 (b) Businesses
required to be licensed pursuant to this section shall
43 apply for racing or wagering or
electronic gaming machine equipment or

Sub. for SB 329

25

1 services licenses in a manner and
upon forms prescribed and furnished
2 by the commission. The commission
shall require disclosure of informa-
3 tion about the owners and officers of
each applicant and may require such
4 owners and officers to submit to
fingerprinting. The commission also may
5 require disclosure of information
about and fingerprinting of such em-
6 ployees of each applicant as the
commission considers necessary. Racing
7 or wagering or electronic gaming
machine equipment or services licenses
8 shall be issued for a period of time
established by the commission but
9 not to exceed 10 years. The
commission shall establish a schedule of
10 application fees and license fees for
racing or wagering or electronic gam-
11 ing machine equipment or services
licenses based upon the type and size
12 of business. The application fee shall not
be refundable if the business
13 fails to qualify for a license. If the
application fee is insufficient to pay
14 the reasonable expenses of processing the
application and investigating
15 the applicant's qualifications for
licensure, the commission shall require
16 the applicant to pay to the commission, at
such times and in such form
17 as required by the commission, any
additional amounts necessary to pay
18 such expenses. No license shall be issued
to an applicant until the appli-
19 cant has paid such additional amounts in
full, and such amounts shall not
20 be refundable except to the extent that
they exceed the actual expenses
21 of processing the application and
investigating the applicant's qualifica-
22 tions for licensure.
23 (c) The
commission may require applicants as a condition of licen-
24 sure to consent to allow agents of the
Kansas bureau of investigation or
25 security personnel of the commission to
search without warrant the li-
26 censee's premises and personal property and
the persons of its owners,
27 officers and employees while engaged in the
licensee's business within
28 the racetrack facility or adjacent
facilities under the control of the organ-
29 ization licensee for the purpose of
investigating criminal violations of this
30 act or violations of rules and regulations
of the commission.
31 (d) Denial of a
racing or wagering or electronic gaming machine
32 equipment or services license by the
commission shall be in accordance
33 with the Kansas administrative procedure
act. The commission may re-
34 fuse to issue a racing or wagering or
electronic gaming machine equip-
35 ment or services license to any business if
any person having an ownership
36 interest in such business, any person who
is an officer of such business
37 or any person employed by such business
within the racetrack facility:
38 (1) Has been
convicted of a felony in a court of any state or of the
39 United States or has been adjudicated in
the last five years, in any such
40 court of committing as a juvenile an act
which, if committed by an adult,
41 would constitute a felony;
42 (2) has been
convicted of a violation of any law of any state or of the
43 United States involving gambling or
controlled substances or has been

Sub. for SB 329

26

1 adjudicated in the last five years in
any such court of committing as a
2 juvenile an act which, if committed
by an adult, would constitute such a
3 violation;
4 (3) fails
to disclose any material fact or provides information, know-
5 ing such information to be false, in
connection with the application for
6 the license;
7 (4) has
been found by the commission to have violated any provision
8 of this act or any rule and
regulation of the commission; or
9 (5) has
failed to meet any monetary or tax obligation to the federal
10 government or to any state or local
government, whether or not relating
11 to the conduct or operation of a race meet
held in this state or any other
12 jurisdiction.
13 (e) The
commission may suspend or revoke the racing or wagering
14 or electronic gaming machine
equipment or services license of any busi-
15 ness for any reason which would justify
refusal to issue such a license.
16 Proceedings to suspend or revoke such
license shall be conducted by the
17 commission or its appointed hearing officer
in accordance with the pro-
18 visions of the Kansas administrative
procedure act.
19 (f) The
commission may provide by rules and regulations for the
20 temporary suspension of a racing or
wagering or electronic gaming ma-
21 chine equipment or services license
by summary adjudicative proceedings
22 in accordance with the Kansas
administrative procedure act upon finding
23 that there is probable cause to believe
that grounds exist for a permanent
24 suspension or revocation of such license.
Such suspension shall be for a
25 period not exceeding 30 days. Upon
expiration of such suspension, the
26 license shall be restored unless the
license has been suspended or revoked
27 as a result of proceedings conducted
pursuant to subsection (e).
28 (g) This section
shall be part of and supplemental to the Kansas
29 parimutuel racing act.
30 Sec.
26. K.S.A. 1998 Supp. 19-101a is hereby amended to read as
31 follows: 19-101a. (a) The board of county
commissioners may transact all
32 county business and perform all powers of
local legislation and adminis-
33 tration it deems appropriate, subject only
to the following limitations,
34 restrictions or prohibitions:
35 (1) Counties
shall be subject to all acts of the legislature which apply
36 uniformly to all counties.
37 (2) Counties may
not consolidate or alter county boundaries.
38 (3) Counties may
not affect the courts located therein.
39 (4) Counties
shall be subject to acts of the legislature prescribing
40 limits of indebtedness.
41 (5) In the
exercise of powers of local legislation and administration
42 authorized under provisions of this
section, the home rule power con-
43 ferred on cities to determine their local
affairs and government shall not

Sub. for SB 329

27

1 be superseded or impaired without the
consent of the governing body of
2 each city within a county which may
be affected.
3
(6) Counties may not legislate on social welfare administered
under
4 state law enacted pursuant to or in
conformity with public law No. 271--
5 74th congress, or amendments
thereof.
6
(7) Counties shall be subject to all acts of the legislature
concerning
7 elections, election commissioners and
officers and their duties as such
8 officers and the election of county
officers.
9
(8) Counties shall be subject to the limitations and
prohibitions im-
10 posed under K.S.A. 12-187 to 12-195,
inclusive, and amendments thereto,
11 prescribing limitations upon the levy of
retailers' sales taxes by counties.
12 (9) Counties may
not exempt from or effect changes in statutes made
13 nonuniform in application solely by reason
of authorizing exceptions for
14 counties having adopted a charter for
county government.
15 (10) No county
may levy ad valorem taxes under the authority of this
16 section upon real property located within
any redevelopment area estab-
17 lished under the authority of K.S.A.
12-1772, and amendments thereto,
18 unless the resolution authorizing the same
specifically authorized a por-
19 tion of the proceeds of such levy to be
used to pay the principal of and
20 interest upon bonds issued by a city under
the authority of K.S.A. 12-
21 1774, and amendments thereto.
22 (11) Counties
shall have no power under this section to exempt from
23 any statute authorizing or requiring the
levy of taxes and providing sub-
24 stitute and additional provisions on the
same subject, unless the resolution
25 authorizing the same specifically provides
for a portion of the proceeds
26 of such levy to be used to pay a portion of
the principal and interest on
27 bonds issued by cities under the authority
of K.S.A. 12-1774, and amend-
28 ments thereto.
29 (12) Counties may
not exempt from or effect changes in the provi-
30 sions of K.S.A. 19-4601 to 19-4625,
inclusive, and amendments thereto.
31 (13) Except as
otherwise specifically authorized by K.S.A. 12-1,101
32 to 12-1,109, inclusive, and amendments
thereto, counties may not levy
33 and collect taxes on incomes from whatever
source derived.
34 (14) Counties may
not exempt from or effect changes in K.S.A. 19-
35 430, and amendments thereto. Any charter
resolution adopted by a
36 county prior to July 1, 1983, exempting
from or effecting changes in
37 K.S.A. 19-430, and amendments thereto, is
null and void.
38 (15) Counties may
not exempt from or effect changes in K.S.A. 19-
39 302, 19-502b, 19-503, 19-805 or 19-1202,
and amendments thereto.
40 (16) Counties may
not exempt from or effect changes in K.S.A. 13-
41 13a26, and amendments thereto. Any charter
resolution adopted by a
42 county, prior to the effective date of this
act, exempting from or effecting
43 changes in K.S.A. 13-13a26, and amendments
thereto, is null and void.

Sub. for SB 329

28

1
(17) Counties may not exempt from or effect changes in K.S.A.
71-
2 301, and amendments thereto. Any
charter resolution adopted by a
3 county, prior to the effective date
of this act, exempting from or effecting
4 changes in K.S.A. 71-301, and
amendments thereto, is null and void.
5
(18) Counties may not exempt from or effect changes in K.S.A.
19-
6 15,139, 19-15,140 and 19-15,141, and
amendments thereto. Any charter
7 resolution adopted by a county prior
to the effective date of this act,
8 exempting from or effecting changes
in such sections is null and void.
9
(19) Counties may not exempt from or effect changes in the
provi-
10 sions of K.S.A. 12-1223, 12-1225, 12-1225a,
12-1225b, 12-1225c and 12-
11 1226, and amendments thereto, or the
provisions of K.S.A. 1998 Supp.
12 12-1260 to 12-1270, inclusive, and
amendments thereto, and 12-1276,
13 and amendments thereto.
14 (20) Counties may
not exempt from or effect changes in the provi-
15 sions of K.S.A. 19-211, and amendments
thereto.
16 (21) Counties may
not exempt from or effect changes in the provi-
17 sions of K.S.A. 19-4001 to 19-4015,
inclusive, and amendments thereto.
18 (22) Counties may
not regulate the production or drilling of any oil
19 or gas well in any manner which would
result in the duplication of reg-
20 ulation by the state corporation commission
and the Kansas department
21 of health and environment pursuant to
chapter 55 and chapter 65 of the
22 Kansas Statutes Annotated and any rules and
regulations adopted pur-
23 suant thereto. Counties may not require any
license or permit for the
24 drilling or production of oil and gas
wells. Counties may not impose any
25 fee or charge for the drilling or
production of any oil or gas well.
26 (23) Counties may
not exempt from or effect changes in K.S.A. 79-
27 41a04, and amendments thereto.
28 (24) Counties may
not exempt from or effect changes in K.S.A. 79-
29 1611, and amendments thereto.
30 (25) Counties may
not exempt from or effect changes in K.S.A. 79-
31 1494, and amendments thereto.
32 (26) Counties may
not exempt from or effect changes in subsection
33 (b) of K.S.A. 19-202, and amendments
thereto.
34 (27) Counties may
not exempt from or effect changes in subsection
35 (b) of K.S.A. 19-204, and amendments
thereto.
36 (28) Counties may
not levy or impose an excise, severance or any
37 other tax in the nature of an excise tax
upon the physical severance and
38 production of any mineral or other material
from the earth or water. Any
39 resolution adopted by any county prior to
the effective date of this act
40 imposing or levying any such tax is null
and void.
41 (29) Counties may
not exempt from or effect changes in K.S.A. 79-
42 2017 or 79-2101, and amendments thereto.
Any charter resolution
43 adopted prior to the effective date of this
act, which affected the provi-

Sub. for SB 329

29

1 sions of K.S.A. 79-2017 or 79-2101,
and amendments thereto, is hereby
2 declared to be null and void.
3
(30) Counties may not exempt from or effect changes in
K.S.A. 74-
4 8701et seq., or K.S.A.
74-8801et seq. or sections 8 through 20, and
5 amendments thereto.
6
(b) Counties shall apply the powers of local legislation
granted in
7 subsection (a) by resolution of the
board of county commissioners. If no
8 statutory authority exists for such
local legislation other than that set forth
9 in subsection (a) and the local
legislation proposed under the authority
10 of such subsection is not contrary to any
act of the legislature, such local
11 legislation shall become effective upon
passage of a resolution of the
12 board and publication in the official
county newspaper. If the legislation
13 proposed by the board under authority of
subsection (a) is contrary to an
14 act of the legislature which is applicable
to the particular county but not
15 uniformly applicable to all counties, such
legislation shall become effec-
16 tive by passage of a charter resolution in
the manner provided in K.S.A.
17 19-101b, and amendments thereto.
18 Sec. 27. K.S.A. 74-8701,
74-8702, 74-8704, 74-8711 and 74-8721
19 and K.S.A. 1998 Supp. 19-101a, 74-8710,
74-8718, 74-8719, 74-8723, 74-
20 8804, 74-8810 and 74-8837 are hereby
repealed.
21 Sec. 28. This act shall
take effect and be in force from and after its
22 publication in the statute book.